Coalition Government: first Cabinet meeting shows 'common purpose'

The first meeting of David Cameron's new coalition Cabinet has ended with
ministers hailing the "common purpose" of the Conservatives and Liberal
Democrats.

The good-humoured optimism shown by Mr Cameron and his Lib Dem deputy Nick Clegg on Wednesday appeared to have infected their colleagues at the top table.

''It was excellent really, it is like we have been working together for years,'' said Iain Duncan Smith, the new Work and Pensions Secretary as he left Downing Street.

Michael Gove, the Education Secretary, added: ''It was great, actually. I think we had a a really constructive meeting. I was delighted by the sense of partnership and common purpose that we had there.''

He was asked if the Conservatives had finally buried the hatchet with their former enemies.

''There were no hatchets to bury,'' came back the reply. ''We had a great agreement and the Cabinet worked very well together.''

He left No 10 chatting amiably to Vince Cable, the Business Secretary - perhaps the Lib Dem minister least comfortable with the idea of working with the Tories.

Earlier, Mr Cable had arrived for the meeting - which lasted around about an hour and 20 minutes - in the equally unlikely company of his new Tory deputy David Willetts and Liam Fox, the new Defence Secretary.

But despite the good humour, there were some who were keen to emphasise the need to get down to the serious business of Government.

''We are all very aware of the seriousness of the situation and frankly, if we don't have a credible programme to reduce the deficit - and at the moment Britain has one of the least credible programmes amongst the developed economies - then we won't have the confidence of the world and the confidence of the country,'' he said.

''The encouraging thing is that I think there is an understanding across all parts of Government that we have got to take very, very difficult decisions.''

His comments came as a BBC surveyof 28 independent economists used by the Treasury to help with forecasts found 24 expected VAT to rise in the coming parliament.

Most predicted the rate would increased from 17.5 per cent to 20 per cent before the end of 2011.

Mr Cameron is expected to name a host of junior ministers in the Government later on Thursday.

Downing Street said Mr Cameron and Mr Clegg opened the meeting by stressing their commitment to work together, highlighting their strong shared agenda.

George Osborne, the new Chancellor, then updated ministers on the economy, stressing the priorities of tackling the deficit, and demonstrating that the UK was "open for business".

He also stressed that he would be working closely with Mr Cable on banking reform - even though the two men are known to have had a difficult relationship in the past.

There were discussions on foreign policy, including the situation in Afghanistan, and the parliamentary timetable.

The meeting ended with the Cabinet agreeing to a 5 per cent pay cut for all ministers.